Ty vs.

Ty (digest)
Alejandro Ty vs. Sylvia Ty
553 SCRA 306
Facts: Alexander Ty, son of Alejandro Ty and husband of Sylvia Ty, dies of cancer at
the age of 34. Sylvia files petition for the settlement of Alexanders intestate estate.
She also asks court to sell or mortgage properties in order to pay the estate tax
amounting to P4,714,560.02 assessed by the BIR. The properties include a parcel of
land in EDSA Greenhills, a residential land in Wack Wack, and the Meridien condo
unit in Annapolis, Greenhills.
Alejandro Ty opposed the move and filed for recovery of the property with
prayer for preliminary injunction and/or temporary restraining order. Plaintif
Alejandro claims that he owns the EDSA, Wack Wack and Meridien condo unit
because he paid for them. The property was supposedly registered in trust for
Alexanders brothers and sisters in case plaintif dies. Plaintif also claimed that Alex
had no financial capacity to purchase the disputed property, as the latter was only
dependent on the former.
Sylvia countered that Alexander had purchased the property with his money.
Alexander was financially capable of purchasing it because he had been managing
the family corporations since he was 18 years old and was also engage in other
profitable businesses.
The RTC granted the application for preliminary injunction and decides in favor of
plaintif regarding the recovery of the property. CA reversed the RTC stating that the
implication created by law under Art. 1448 does not apply if the property was in the
name of the purchasers child. They agreed that plaintif partly paid for the EDSA
property. Plaintif appealed.
Issue: whether there was an implied trust under Art. 1448 of the Civil Code?
Held: No, there was no implied trust created in relation to the EDSA property. If the
person to whom the title is conveyed is the child of the one paying the price of the
sale, no trust is implied by law under Art. 1448, the so-called purchase money
resulting trust. The said article provides an exception: if the person to whom the
title is conveyed is a child, legitimate or illegitimate, of the one paying the price of
the sale, NO TRUST is IMPLIED by LAW, it being disputable presumed that there is a
gift in favor of the child. The Court also noted that plaintif failed to prove that he
did not intend a donation.
Regarding the Meridien Condo and Wack Wack property, the court said that
plaintif failed to prove that purchase money came from him. They also said that
Alexander was capable of purchasing the property as he had been working for nine

years, had a car care business, and was actively engaged in the business dealings
of several family corporations from which he received emoluments and other
benefits. Hence, no implied trust created because there was no proof that plaintif
had paid for said properties.

lawphil.net

G.R. No. 112872

Republic of the Philippines
SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 112872

April 19, 2001

THE INTESTATE ESTATE OF ALEXANDER T. TY, represented by the Administratrix,

SYLVIA S. TY, petitioner,
vs.
COURT OF APPEALS, HON. ILDEFONSO E.GASCON, and ALEJANDRO B. TY,
respondents.

G.R. No. 114672

April 19, 2001

SYLVIA S. TY, in her capacity as Administratrix of the Intestate Estate of Alexander T. Ty,
petitioner,
vs.
COURT OF APPEALS and ALEJANDRO B. TY, respondents.
MELO, J.:
Before the Court are two separate petitions for certiorari, G.R. 112872 under Rule 65 alleging
grave abuse of discretion amounting to lack or excess of jurisdiction, and G.R. No.114672 under
Rule 45 on purely questions of law. As these two cases involved the same parties and basically
the same issues, including the main question of jurisdiction, the Court resolved to consolidate
them.

On February 27, 2001, the Court issued its resolution in A.M. 00-9-03 directing the redistribution of old cases such as the ones on hand. Thus, the present ponencia.
The antecedent facts are as follows:lawphil.net
Petitioner Sylvia S. Ty was married to Alexander T. Ty, son of private respondent Alejandro B.
Ty, on January 11, 1981. Alexander died of leukemia on May 19, 1988 and was survived by his
wife, petitioner Sylvia, and only child, Krizia Katrina. In the settlement of his estate, petitioner
was appointed administratrix of her late husbands intestate estate.
On November 4, 1992, petitioner filed a motion for leave to sell or mortgage estate property in
order to generate funds for the payment of deficiency estate taxes in the sum of P4,714,560.00.
Included in the inventory of property were the following:
1) 142,285 shares of stock in ABT Enterprises valued at P14,228,500.00;itc-alf
2) 5,000 shares of stock in Intercontinental Paper Industries valued at
P500,000.00;
3) 15,873 shares of stock in Philippine Crystal Manufacturing, Inc. valued at
P1,587,300.00;
4) 800 shares of stock in Polymart Paper Industries, Inc. valued at P80,000.00;itcalf
5) 1,800 shares of stock in A.T. Car Care Center, Inc. valued at P188,000.00;
6) 360 shares of stock in Union Emporium, Inc. valued at P36,000.00;lawphil.net
7) 380 shares of stock in Lexty, Inc. valued at P38,000.00; and
8) a parcel of land in Biak-na-Bato, Matalahib, Sta. Mesa, with an area of 823
square meters and covered by Transfer Certificate of Title Number 214087.
Private respondent Alejandro Ty then filed two complaints for the recovery of the abovementioned property, which was docketed as Civil Case Q-91-10833 in Branch 105 Regional Trial
Court of Quezon City (now herein G.R. No. 112872), praying for the declaration of nullity of the
deed of absolute sale of the shares of stock executed by private respondent in favor of the
deceased Alexander, and Civil Case Q-92-14352 in Branch 90 Regional Trial Court of Quezon
City (now G.R. No. 114672), praying for the recovery of the pieces of property that were placed
in the name of deceased Alexander by private respondent, the same property being sought to be
sold out, mortgaged, or disposed of by petitioner. Private respondent claimed in both cases that
even if said property were placed in the name of deceased Alexander, they were acquired through
private respondents money, without any cause or consideration from deceased Alexander.

Motions to dismiss were filed by petitioner. Both motions alleged lack of jurisdiction of the trial
court, claiming that the cases involved intra-corporate dispute cognizable by the Securities and
Exchange Commission (SEC). Other grounds raised in G.R. No. 114672 were:
1) An express trust between private respondent Alejandro and his deceased son
Alexander:itc-alf
2) Bar by the statute of limitations;
3) Private respondents violation of Supreme Court Circular 28-91 for failure to
include a certification of non-forum shopping in his complaints; and
4) Bar by laches.lawphil.net
The motions to dismiss were denied. Petitioner then filed petitions for certiorari in the Court of
Appeals, which were also dismissed for lack of merit. Thus, the present petitions now before the
Court.
Petitioner raises the issue of jurisdiction of the trial court. She alleges that an intra-corporate
dispute is involved. Hence, under Section 5(b) of Presidential Decree 902-A, the SEC has
jurisdiction over the case. The Court cannot agree with petitioner.
Jurisdiction over the subject matter is conferred by law (Union Bank of the Philippines vs. Court
of Appeals, 290 SCRA 198 [1998]). The nature of an action, as well as which court or body has
jurisdiction over it, is determined based on the allegations contained in the complaint of the
plaintiff (Serdoncillo vs. Benolirao, 297 SCRA 448 [1998]; Tamano vs. Ortiz, 291 SCRA 584
[1998]), irrespective of whether or not plaintiff is entitled to recover upon all or some of the
claims asserted therein (Citibank, N.A. vs. Court of Appeals, 299 SCRA 390 [1998]). Jurisdiction
cannot depend on the defenses set forth in the answer, in a motion to dismiss, or in a motion for
reconsideration by the defendant (Dio vs. Conception, 296 SCRA 579 [1998]).
Petitioner argues that the present case involves a suit between two stockholders of the same
corporation which thus places it beyond the jurisdictional periphery of regular trial courts and
more within the exclusive competence of the SEC by reason of Section 5(b) of Presidential
Decree 902-A, since repealed. However, it does not necessarily follow that when both parties of
a dispute are stockholders of a corporation, the dispute is automatically considered intracorporate in nature and jurisdiction consequently falls with the SEC. Presidential Decree 902-A
did not confer upon the SEC absolute jurisdiction and control over all matters affecting
corporations, regardless of the nature of the transaction which gave rise to such disputes (Jose
Peneyra, et. al. vs. Intermediate Appellate Court, et. al., 181 SCRA 245 [1990] citing DMRC
Enterprises vs. Este del Sol Mountain Reserve, Inc., 132 SCRA 293 [1984]). The better policy in
determining which body has jurisdiction over this case would be to consider, not merely the
status of the parties involved, but likewise the nature of the question that is the subject of the
controversy (Viray vs. Court of Appeals, 191 SCRA 309 [1990]). When the nature of the
controversy involves matters that are purely civil in character, it is beyond the ambit of the
limited jurisdiction of the SEC (Saura vs. Saura, Jr., 313 SCRA 465 [1999]).

In the cases at bar, the relationship of private respondent when he sold his shares of stock to his
son was one of vendor and vendee, nothing else. The question raised in the complaints is whether
or not there was indeed a sale in the absence of cause or consideration. The proper forum for
such a dispute is a regular trial court. The Court agrees with the ruling of the Court of Appeals
that no special corporate skill is necessary in resolving the issue of the validity of the transfer of
shares from one stockholder to another of the same corporation. Both actions, although involving
different property, sought to declare the nullity of the transfers of said property to the decedent
on the ground that they were not supported by any cause or consideration, and thus, are
considered void ab initio for being absolutely simulated or fictitious. The determination whether
a contract is simulated or not is an issue that could be resolved by applying pertinent provisions
of the Civil Code, particularly those relative to obligations and contracts. Disputes concerning
the application of the Civil Code are properly cognizable by courts of general jurisdiction. No
special skill is necessary that would require the technical expertise of the SEC.
It should also be noted that under the newly enacted Securities Regulation Code (Republic Act
No. 8799), this issue is now moot and academic because whether or not the issue is intracorporate, it is the regional trial court and not longer the SEC that takes cognizance of the
controversy. Under Section 5.2 of Republic Act No. 8799, original and exclusive jurisdiction to
hear and decide cases involving intra-corporate controversies have been transferred to courts of
general jurisdiction or the appropriate regional trial court.
Other issues raised by the petitioner in G.R. No. 114672 are equally not impressed with merit.
Petitioner contends that private respondent is attempting to enforce an unenforceable express
trust over the disputed real property. Petitioner is in error when she contends that an express trust
was created by private respondent when he transferred the property to his son. Judge Abraham P.
Vera, in his order dated March 31, 1993 in Civil Case No. Q-92-14352, declared:
[e]xpress trusts are those that are created by the direct and positive acts of the
parties, by some writing or deed or will or by words evidencing an intention to
create a trust. On the other hand, implied trusts are those which, without being
expressed, are deducible from the nature of the transaction by operation of law as
matters of equity, independently of the particular intention of the parties. Thus, if
the intention to establish a trust is clear, the trust is express; if the intent to
establish a trust is to be taken from circumstances or other matters indicative of
such intent, then the trust is implied (Cuaycong vs. Cuaycong, 21 SCRA 1191
[1967].
In the cases at hand, private respondent contends that the pieces of property were transferred in
the name of the deceased Alexander for the purpose of taking care of the property for him and his
siblings. Such transfer having been effected without cause of consideration, a resulting trust was
created.
A resulting trust arises in favor of one who pays the purchase money of an estate
and places the title in the name of another, because of the presumption that he
who pays for a thing intends a beneficial interest therein for himself. The trust is

said to result in law from the acts of the parties. Such a trust is implied in fact
(Tolentino, Civil Code of the Philippines, Vol. 4, p. 678).
If a trust was then created, it was an implied, not an express trust, which may be proven by oral
evidence (Article 1457, Civil Code), and it matters not whether property is real or personal
(Paras, Civil Code of the Philippines, Annotated, Vol. 4, p. 814).
Petitioners assertion that private respondents action is barred by the statute of limitations is
erroneous. The statute of limitations cannot apply in this case. Resulting trusts generally do not
prescribe (Caladiao vs. Vda. de Blas, 10 SCRA 691 [1964]), except when the trustee repudiates
the trust. Further, an action to reconvey will not prescribe so long as the property stands in the
name of the trustee (Manalang, et. al. vs. Canlas, et. al., 94 Phil. 776 [1954]). To allow
prescription would be to permit a trustee to acquire title against his principal and the true owner.
Petitioner is also mistaken in her contention that private respondent violated Supreme Court
Circular 28-91, dated September 17, 1991 and transfer having been effected without cause of
consideration, a resulting trust was created.
A resulting trust arises in favor of one who pays the purchase money of an estate
and places the title in the name of another, because of the presumption that he
who pays for a thing intends a beneficial interest therein for himself. The trust is
said to result in law from the acts of the parties. Such a trust is implied in fact
(Tolentino, Civil Code of the Philippines, Vol. 4, p. 678).
If a trust was then created, it was an implied, not an express trust, which may be proven by oral
evidence (Article 1457, Civil Code), and it matters not whether property is real or personal
(Paras, Civil Code of the Philippines, Annotated, Vol. 4, p. 814).1wphi1.nt
Petitioners assertion that private respondents action is barred by the statute of limitations is
erroneous. The statute of limitations cannot apply in this case. Resulting trusts generally do not
prescribe (Caladiao vs. Vda. de Blas, 10 SCRA 691 [1964]), except when the trustee repudiates
the trust. Further, an action to reconvey will not prescribe so long as the property stands in the
name of the trustee (Manalang, et. al. vs. Canlas, et. al., 94 Phil. 776 [1954]). To allow
prescription would be to permit a trustee to acquire title against his principal and the true owner.
Petitioner is also mistaken in her contention that private respondent violated Supreme Court
Circular 28-91, dated September 17, 1991 and transfer having been affected without cause of
consideration, a resulting trust was created.
A resulting trust arises in favor of one who pays the purchase money of an estate
and places the title in the name of another, because of the presumption that he
who pays for a thing intends a beneficial interest therein for himself. The trust is
said to result in law from the acts of the parties. Such a trust is implied in fact
(Tolentino, Civil Code of the Philippines, Vol. 4, p. 678).

If a trust was then created, it was an implied, not an express trust, which may be proven by oral
evidence (Article 1457, Civil Code), and it matters not whether property is real or personal
(Paras, Civil Code of the Philippines, Annotated, Vol. 4, p. 814).
Petitioners assertion that private respondents action is barred by the statute of limitations is
erroneous. The statute of limitations cannot apply in this case. Resulting trusts generally do not
prescribe (Caladiao vs. Vda. de Blas, 10 SCRA 691 [1964]), except when the trustee repudiates
the trust. Further, an action to reconvey will not prescribe so long as the property stands in the
name of the trustee (Manalang, et. al. vs. Canlas, et. al., 94 Phil. 776 [1954]). To allow
prescription would be to permit a trustee to acquire title against his principal and the true owner.
Petitioner is also mistaken in her contention that private respondent violated Supreme Court
Circular 28-91, dated September 17, 1991 and which took effect on January 1, 1992. Although
Section 5, Rule 7 of the 1997 Rules on Civil Procedure makes the requirement of filing a
verification and certificate of non-forum-shopping applicable to all courts, this cannot be applied
in the case at bar. At the time the original complaint was first filed on December 10 (for G.R.
112872) and 28 (for G.R. 114672), 1992, such certification requirement only pertained to cases
in the Court of Appeals and the Supreme Court. The Revised Circular 28-91, which covered the
certification requirement against non-forum shopping in all courts, only took effect April 1,
1994. Further, the subject heading of the original circular alone informs us of its topic: that of
additional requisites for petitions filed with the Supreme Court and the Court of Appeals to
prevent forum shopping or multiple filing of petitions and complaints. Section 1 of the Circular
makes it mandatory to include the docket number of the case in the lower court or quasi-judicial
agency whose order or judgment is sought to be reviewed. Such a requirement clearly indicates
that the Circular only applies to actions filed with the Court of Appeals and the Supreme Court.
Contrary to what petitioner contends, there could be no laches in this case. Private respondent
filed his complaint in G.R. No. 112872 on December 10, 1992 (later amended on December 23,
1992) and in G.R. No. 114672 on December 28, 1992, only over a month after petitioner filed in
the probate proceedings a petition to mortgage or sell the property in dispute. Private
respondents actions were in fact very timely. As stated in the complaints, private respondent
instituted the above actions as the property were in danger of being sold to a third party. If there
were no pending cases to stop their sale, he would no longer be able to recover the same from an
innocent purchaser for value.
Withal, the Court need not go into any further discussion on whether the trial court erred in
issuing a writ of preliminary injunction.1wphi1.nt
WHEREFORE, the petition for certiorari in G.R. No. 112872 is DISMISSED, having failed to
show that grave abuse of discretion was committed in declaring that the regional trial court had
jurisdiction over the case. The petition for review on certiorari in G.R. 114672 is DENIED,
having found no reversible error was committed.
SO ORDERED.lawphil.net
Vitug, Panganiban, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concur.

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